The Core of a Good Strategy

Three Fundamental Elements

1. Diagnosis: Simplifying the problem and identifying challenges.
2. Guiding Policies: How to respond to challenges?
3. Coherent Actions: A series of actions that mutually reinforce each other under the guidance of principles.

Examples

In business, the challenge is usually dealing with change and competition.

1. Diagnosing the specific structure of the challenge rather than simply naming performance goals.
2. Choosing an overall guiding policy for dealing with the situation that builds on or creates some type of leverage or advantage.
3. Designing a configuration of actions and resource allocations that implement the chosen guiding policy.

In many large organizations, the challenge is often diagnosed as internal.

1. The organization’s competitive problems may be much lighter than the obstacles imposed by its own outdated routines, bureaucracy, pools of entrenched interests, lack of cooperation across units, and plain-old bad management.
2. Reorganization and renewal.
3. Changes in people, power, and procedures.

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